Over the past few days, you have obviously been reading of the Madoff case. It is stunning to hear of the impact and how far-reaching this situation has become. From all indications, Madoff was a "stand up guy" that everyone implicitly trusted. His assets under management and roster of investors would never give anyone the slightest clue that he might be up to no good. But to everyone's surprise, he was in fact no good - in fact he's a fraud.

Its this kind of situation that usually gets investors to reconsider the importance of due-diligence. Not only should investors have a sound understanding of a money management firm's business model but also make sure that all the firms operating activities make sense. Always keep your eyes open for "warning signs."

With that said, I want to take this time to discuss three "warning signs" that can sometime pop up when dealing with a hedge fund money manager:

Lesson: Make sure you understand the basic premise of the trader's strategy. Understand that I am not saying that complex models are bad...but rather, if it is complex, make sure that you can generally explain the money-making tools. Are they a long-only shop? Do they trade S&P futures? Or is some type of statistical arbitrage system?

Bottom line: If you hear the words "black box" and/or "proprietary" too much then ask more questions. (By the way, nothing drives me crazier than hearing managers using the word "black box" to describe their techniques. Its overly-generic and way overused these days.)

2. Madoff not only managed client assets but initiated trades in client accounts, executed the trades, custodied those assets, constructed his own client statements and administered the paperwork. There were no other parties involved - this is a clear red-flag!

Lesson: Unless you are dealing with a Goldman or UBS size firm, then for the most part, it is a good idea to separate your trading manager from the custodial services. Ensuring a strict segregation between these two functions can go a long way towards deterring any wrongdoing.

3. At the end of every quarter, Madoff's 13F filing showed very little in the way of equity holdings. And when questioned as to why, their response" "...we go into cash at the end of every quarter..."

Lesson: I can see this happening every now and then, but to have your hedge fund go into cash at the end of every quarter doesn't sound very efficient. If your hedge fund has to file a 13F always spend time reviewing it once it is filed.

What is the Split Strike Conversion strategy?

In the past few days, I have also had a number of clients ask me to explain to them the "Split Strike Conversion" strategy that Madoff marketed to his investors.

Split Strike Conversion defined:

Typically, the strategy consists of the simultaneous ownership of 30-35 S&P 100 stocks, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. The sale of the calls is designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sale of the calls, limit the portfolio’s downside. The strategy creates a boundary on a stock or basket of stocks, limiting its upside while at the same time protecting against a sharp price decline.

Long story short: Put a collar around a basket of S&P 100 stocks.

A fair number of institutional managers long questioned how Madoff could pull off such consistent risk-adjusted returns. I guess when it seems too good to be true then it probably is.

Investors seeking safety from losses in equity markets charged the Treasury zero percent interest when the government sold $30 billion of four-week bills on Dec. 9th. That was the same day that three-month bill rates turned negative for the first time since the US began selling debt in 1929.

With that said, I am very bearish on the near-term outlook of treasuries. This relentless frenzy to buy treasuries reminds me very much of the tech bubble in 2000.

In fact, I am hearing that many large hedge funds are beginning to short Treasury Bonds with the notion that they are way overbought. And in this case, I agree.

November 19, 2008

If that isn't signaling the near of a bottom then I am not sure what does. One must ask themselves, "where is the real risk?"

I can either:

[A] Buy overpriced 10-year Treasuries that are barely a bit higher than average inflation numbers

or

[B] Purchase equities at dislocated prices that are now giving way to the S&P 500 trading at 17 times next years earnings and yielding a dividend greater than the 10-year.

The argument to this conclusion would be that dividends will be slashed by most firms in the index thus lowering the dividend yield. And this is true. However, the flip side to this argument is that the 10-year treasury, along with most other govies, are overbought. And I think they are. In fact, at one point last week T-bills had a negative implict yield - in other words, bond investors were paying the government to hold their funds.

With all of that said, I pick option "B" as listed above. With the S&P stocks trading at such low multiples, the selling will soon stop and the heavy buying will commence. Hang tight people.

November 18, 2008

If you read my blog yesterday, you would have seen that I said we would have a rebound today. As I pointed out in my post, Tuesdays have behaved rather well for long-only investors. Unfortunately it appears to be short-lived as Wednesday has played out to be the worst trading day of the week. We shall see how it plays out.

With all of that said, I think we buck that trend tomorrow. I see us setting a base to move higher as we reach the "holiday effect" part of the year. I am a believer in the "holiday effect" - investors usually bid up prices because the holiday season brings a renewed sense of optimism.

Other notes from today's trading session:

1) Rumor 1 - TD Bank and PNC Financial may be getting ready to announce a secondary equity offering. Current holders of these name should beware. EPS dilution may be on the horizon. The official announcement of a secondary offering will almost be certainly followed by a decrease of 7-10% in the equity price.

2) Rumor 2 - Famed hedge fund manager-turned-Sears CEO Edward Lampert is is said to be exiting large positions due to the poor performance in his hedge fund. Only 24 months ago, "Fast Eddie" was proclaimed as the next Warren Buffet. Don't get me wrong...I still think Eddie is a superstar but building a legacy that closely resembles that of the "Oracle from Omaha" may be a bit much. Besides, have you been to a Sears lately? Its like being in a cemetery.

3) Signs that we are close to the bottom can come in many different sizes and shapes.

[ESPN] ANN ARBOR, Mich. -- Rich Rodriguez loves to win -- and he hates to lose as much as anyone. Michagan's coach, though, tries to keep as much perspective as he can. Rodriguez has his wife and kids around him after practices, at the team hotel and on bus trips to the stadium. His office door is always wide open, allowing visitors to say hello.

Heading into his first Michigan-Ohio Stategame -- where the Wolverines are expected to extend their dubious record with a ninth loss -- he tried to deliver a message to fans who have lost touch.

"It's amazing some of the things that people would say [on a message board] or yell at you of a personal nature," Rodriguez said Monday. "You almost want to tell them, 'Get a life.'

"There's a whole lot bigger problems. Look at the economy."

b. New investment instruments begin to hit the market and the sheep begin to chase the "new" thing that serves as the alternative to equities:

The proposed fund is part of an expanded line of products for Alfa's wealthy clients, including investment vehicles dedicated to art collectibles, vintage wine and fashion.

The firm is expected to launch the diamond fund in the spring of 2009. The fund, which will have minimum investment of €1 million, will invest in securities of Russian and foreign diamond mining companies. The estimated yield of the fund would be 15-17%.

Thats about it for tonight. As I mentioned in previous posts, I will try to do a better job posting my thoughts on the blog. Good night and good luck from Dallas! And always remember: The bulls will prevail.

November 17, 2008

Over on TheStreet.com, blogger Scott Rothbort, founder and president of LakeView Asset Management came up with following insight with respect to daily trading moves:

"...I was also asked for the daily trading moves for the SPX this year. With today in the books, here it goes:

Mondays: -11.46%

Tuesdays: 12.86%

Wednesdays: -35.58%

Thursdays: 4.24%

Fridays: -11.37%..."

Let's hope his data is right - should bode well for today's selloff.

Speaking of short-term market returns, I think tomorrow will be an up-day for us on the market. My reasons:

1) 90% of stocks are under their 10 day moving average. The selloff in the large cap space is way overdone at this point. Too much negativity bringing down too many very good names. Case in point: Pfizer. I will grant you that PFE is not the great company it used to be. Expiring patents and a deteriorating pipeline lead a host of their problems. But how can you disregard their consistent free cash flow numbers. And how can anyone turn their back on a stock whose dividend yield sits north of 7 percent? It's begging to be bought...

2) Based on recent redemptions numbers, many so-called "smart money, long term investors" are throwing in the towel. In fact, these deep selling spirals we are seeing are not "individual investors" but rather the "smart money" selling into further weakness. October and November will be seen as the time that hedge funds sold massive positions to raise cash because they are either closing shop or managers/traders have become "gun shy." These selloffs aren't due to the "Main Street E-Trade" investor hitting the sell button to trade out of their 100 shares of Apple. It's coming from the hedge fund manager thats trying to avoid losing his yacht.

3) VIX closed at 69.10, its highest level in 14 trading days. The VIX has historically been a superb indicator of sentiment. The higher it is, then the more likely people are "giving up" which means that its time to BUY!

4) We are getting awfully close to re-testing the 7900-8000 level on the DJIA before rallying towards the upper 8000s. It would appear that in this market, traders are paying more attention to technicals than they are to fundamentals. Another case in point: last Thursday's price action. The market had an 800 point swing on no real news. In this kind of market, irrational thinking trumps rational models. I recommend investors either "buy" or "sit on their hands." This is no time to throw in the towel!

5) Almost every negative piece of news is in the market now. No surprises await us. At this point, we have just about seen it all. Here's a quick list:

Lehman and Bear are out of business.

The Russian markets are closed and have lost about 60% of their value.

The Presidential election has come and gone.

Hedge funds are blowing up left and right.

Mayors of US Cities are asking for bailout funds.

GM is on the brink.

The commercial paper market was frozen (and is thawing right now).

Money markets almost broke the $1 threshold.

Interest rates are closing in on zero.

Warren Buffet is making his trademark "bold" bets.

AIG nearly went out of business.

Goldman Sachs called Citibank to see if Citi would buy them out.

And Citi said, "...thanks but no thanks..."

Is there anything else that will surprise us? I submit to you: No.

Thanks for reading, good luck trading, and stay invested because we all know that the bulls always win in the end.

November 02, 2008

I apologize for not posting as much recently. The market has been tough and I have been plugged into my trading. With that said, I wanted to take a minute and discuss a few items.

1. I think market gets close to hitting 11000 on the Dow before year end. Much lower gas prices will have a significant increase in consumer spending and traveling.

2. I was amazed to hear the Goldman contacted Citi about merging firms. I didn't think GS would move to be swallowed up by another firm but WOW! I think since the market has settled down slightly then I would expect that they should be okay.

3. Speaking of Goldman, Warren sure got some good terms on his deal with the GS. The hefty 10% dividend and warrants certainly raised the cost of capital for GS - actually hurts the firm from a valuation standpoint.

4. Thank goodness that the election is near. I am so tired of seeing the commercials and getting hit by Robocalls during the day. Good news for investors: I think we may see a nice rally later this week.

5. I will increase my posting frequency over the next month. Be sure to check out my twitter account as well. (Twitter is a micro-blogging service that is starting to gain lots of traction - I highly recommend it)

September 30, 2008

It’s been a while since I have last posted. The markets have indeed kept me busy. I will try to get back to a normal posting schedule.

I did want to spend a couple of minutes discussing a few topics that I have been thinking about lately.

1) IT’S A BAD IDEA TO BAN SHORT SELLERS
While I admit that as a long-only manager, shorts can be very painful to my holdings. But I still think they play a very critical role in our trading. Very good short sellers will expose bad business models and force them to improve themselves or go out of business. They play an important part in our market ecosystem and to ban them can artificially inflate valuations. Beware when they come back…it could get ugly.

2) MARK-TO-MARKET IS EXACTLY WHAT WE NEED
Recently I have heard politicians discuss the possibility of modifying the mark-to-market accounting rules. Rather, they say we should potentially value these securities as if they were to be “held to maturity.” Therein lies the problem.

Investment banks and prop desks trade the securities. They are not in the business to holding them to maturity. Showing these assets as being “held to maturity” will only further inflate asset values and create an even larger bubble burst.

3) RECENT MARK CUBAN BLOG POST = GARBAGE
I have always been a fan of Cubes. He thinks outside the box and is a superb entrepreneur. I am a huge Maverick fan and I really believe he’s one of the best owners in sports, but check out this senseless post from his blog :

Tax the Hell Out of Wall Street; Give it to Main Street

Sep 30th 2008 9:02AM

Tax every single share of stock that is bought and sold 10 cents per transaction. One dime. If you buy a share of stock, your brokerage pays a 10c tax. If you sell a share, your brokerage pays a 10c tax. 1 share, 100 million shares. Its 10 cents per share.

Of course the tax will be paid for by those of us who are buying and selling stocks. So what. Here is the reality. If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process.

If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.

Whats the economic impact ?

If the NYSE, Nasdaq, Amex and OTC are trading 2 Billion shares a day, thats $ 200 Million Dollars PER DAY. If there are 260 trading days a year. Thats about 52 Billion dollars a year.

Thats real money.

Wow…where do I start. To make it easier, let me bullet point my thoughts:

1. So he wants to tax each share. Does does he not realize that if we begin to tax traded shares then we will see volume dry up? Low volume would create serious volatility in the market. Most traders know that light volume days mean more volatility thus lower liquidity for assets and a very inefficient market. Honestly, do we really want more volatility right now? I vote no.

2. I am sorry Cubes but your math is overly-simplistic. By taxing traded shares, then you would see much lower volume. Your tax revenue projections would, at best, be maybe 25% of your guesstimate.

3. There are so many arguments I could make on this post. I think the two above are enough for now…..however how about I propose the following:

TAX THE HELL OUT OF SPORTS OWNERS, GIVE IT TO MAIN STREET

1. Put a 15% tax on sporting event tickets and concessions. Not only would Main Street collect money on tax receipts, but it will force the consumer to save for retirement and not waste $200 for a family of 5 to see a football game.

Isn’t part of the credit crisis the fact that the consumer is “tapped out.” This should help cure part of the that problem.

2. Make the owners finance their own sports venues rather than pushing it on “Main Street.” They sell us on the idea of “perceived” economic benefits from having a sports venue. That’s the oldest trick in the book.

(I actually don’t believe we should “tax the hell out of sports owners”…rather, I want to point out how silly it is for a billionaire to tell others how to run their business when they themselves have been subsidized with taxpayer money.)

September 16, 2008

UPDATE: AIG Ratings Cut by S&P and Moody's. Firms moves to raise capital otherwise they may be forced to file for bankruptcy later this week.

AIG is suffering a severe cash crunch as rating agencies cut the firm's credit ratings, forcing the firm to raise $14.5 billion to cover its obligations.

From the Wall Street Journal: With AIG now tottering, a crisis that began with falling home prices and went on to engulf Wall Street has reached one of the world's largest insurance companies, threatening to intensify the financial storm and greatly complicate the government's efforts to contain it. The company, whose stock fell 61% yesterday, is such a big player in insuring risk for institutions around the world that its failure could shake the global financial system.

AIG has been scrambling to raise as much as $75 billion to weather the crisis, and people close to the situation said that if the insurer doesn't secure fresh funding by Wednesday, it may have no choice but to opt for a bankruptcy-court filing.

The Fed is currently trying to have Goldman Sachs and JP Morgan Chase extend a $70 billion credit facility to help prop up AIG according to people familiar with the situation. This comes on the heels of AIG's stock sliding more than 60% on Monday.

Tomorrow will be a big day for the market. Not only is AIG under the gun but traders fear that a domino effect could take place.

AIG was seeking help from the Fed but one problem that arises is that the Fed is really only to supposed to assist banks and not insurers therefore there are limitations as to what kind of help can be offered. At this point, Goldman and JP Morgan may have to come to the rescue.

The ratings assessor also lowered AIG's short-term counterparty credit rating by two levels to A-2 from the top A-1+ rating, and cut its counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries by three notches to A+ from AA+. The ratings remain on watch for a possible further downgrade, S&P said.

AIG's senior unsecured debt rating was downgraded by Moody's to A2 from Aa3. Moody's said in a statement that its decision was made ``in light of the continuing deterioration in the U.S. housing market and the consequent impact on the group's liquidity and capital position due to its related investment and derivative exposures.'' Moody's placed AIG's long-term and Prime-1 short- term ratings on review for possible downgrades.

From the New York Times: Bank of America is in advanced talks to buy Merrill Lynch for at least $38.25 billion in stock, people briefed on the negotiations said on Sunday, as a means to preserve that investment bank while Lehman Brothers looks likely to collapse.

The move suggests a desperate effort at triage on Wall Street, as Bank of America works to shore up the likely next victim of the credit crunch. A deal, valued at between $25 a share to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.

Bank of America, the nation’s second largest bank by asset size, had been mulling buying Lehman, perhaps in a consortium with other financial players. But with financial aid from the government looking unlikely, Bank of America has moved on to Merrill, these people said.

As Lehman began to totter in recent weeks, investors feared that Merrill would be the next victim of the credit squeeze. Shares in Merrill, which has already reported tens of billions of dollars in losses, have plunged more than 68 percent over the past year.

Lehman continues to fight for its life after Barclays deal falls apart this afternoon. As I pointed out in my suitors list, Barclays has the capital but the problem was that any deal from Barclays would have required shareholder approval. Needless to say, that won't work.

There's continues to be lots of speculation today on which firms might be interested in taking on Lehman. And it’s no mystery now that Lehman is looking for a buyer. The firm confirmed that Dick Fuld is actively seeking the white knight scenario.

I am leaning towards a BofA - Lehman deal.

With that said, I decided to put a small list together of firms that could be involved in potentially buying Lehman. In no specific order…

Bank of America – represents the best chance of a US-based bank to take on Lehman. Of course, BAC struck a bad deal earlier this year (Countrywide acquisition) which leads me to believe that they probably still have a “bad taste in the their mouth” at the moment. However, they do have the resources to make it happen and coupling LEH with BAC might even make sense from a “net positive synergy” standpoint.

LEH would provide their strong equity underwriting platform to BAC’s extensive roster of heavyweight banking clients. BAC would also be able to leverage LEH’s oil and gas group to gain more market share in investment banking.

And finally, BAC would be able to step into the prime brokerage business (actually step back into it after they recently sold their platform to BNP Paribas). Although, I am not sure they want to get back into prime brokerage considering how bad the hedge fund market is right now with respect to the industry-wide deleveraging.

Plus BAC still has a few other problems which includes $5 billion settlement for the auction-rate securities debacle.

While I would say “spending” is a bit tight at BAC right now, they do have the balance sheet to put a deal together. They are definitely in the mix - the question is "how much?"

Probability: BAC is the most likely of all US firms to do a deal. But I am not sure any US firms are comfortable enough to take the risk.

Goldman Sachs – the match of Goldman and Lehman hit blogs this morning and, of course, CNBC’s Charlie Gasparino put an end to that rumor with his “sources.”

GS might be somewhat interested in doing this deal but I believe under two conditions: (1) at a price of about $1.5-$2.00 per share (“takeunder” price where its bought cheaper than its current market price) which most certainly Dick Fuld will push away and (2) assurances that the Fed would provide a liquidity backstop of-sorts as they did for the JP Morgan-Bear deal.

And let’s suppose hypothetically those conditions were to be met, it might still be asking a lot. GS, who steps up to earnings plate next week, might be facing their own host of debt-related problems at the moment. One of the largest holders of Level 3 assets on Wall Street, GS would be reluctant to take on the responsibility of trading more toxic debt into this beleaguered market environment.

Probability: Unlikely that it would happen with Goldman. They are probably too busy putting out their own fires and need to make sure that they don’t compromise the strength of their balance sheet. They probably figure they can win in the situation by simply eating up investment banking market share once Lehman gets swallowed up by another firm.

JP Morgan – after digesting Bear it would be a lot to ask from Dimon and his army of executives. No way they could do this kind of deal. The firm is stretched right now. Just wouldn’t make sense.

Citigroup – one word: impossible! The firm is too busy shedding non-core assets and dumping bad business units. Not only did they lose huge on Pandit’s hedge funds but are also suffering from writedowns in Fannie and Freddie Mac.

Probability: JPM and C are nowhere in the game - too many battles to fight on various other fronts. You have better odds on a Vegas table then betting that one of these two firms plays White Knight.

Korea Development Bank – might be the dark horse in all of the speculation. Up until about late last week, LEH and KDB were in close negotiations. KDB was said to have offered six trillion won (4.3-5.2 billion dollars) for a 25% stake. Think about what that sum of money could buy them now – the whole thing? Maybe so.

South Korean regulators would be the enemy to this deal. The chairman of the South Korean Financial Services Commission explicitly told KDB that such a transaction would be highly scrutinized.

Probability: At this new “discounted” price, I wouldn’t be surprised to see KDB roll the dice. In KDB's eyes, the "cheap just got cheaper."

Other firms to watch: HSBC and Barclays. Barclays intrigues me slightly to the extent that they enjoy about a $40 billion market cap and have plentiful resources to do a deal.

September 11, 2008

(1) UPDATE (5:05pm CST): Word early this morning on another site, Naked Capitalism, was that Goldman Sachs could buy Lehman. I didn't think Goldman would be a player but I think can be if the Fed backstops their debt. However, at this point, I don't see that happening. Notice the words I use: "at this point."

Below is the post that hit the Naked Capitalism blog:

I heard this rumor from two sources, that Lehman is in its final day or two and Goldman is willing to buy the firm, and the second source, who volunteered the information, is sufficiently well plugged in that I trust the reading. This came from a former senior employee:

A couple friends of mine from LEH trading desk called me this a.m. to say that mgmt has taken employees aside to let them know that the end should come in next 24-48 hours. Ratings agencies apparently told them that the steps were not sufficient to prevent a d/g, and LEH mgmt asked them to hold off for a day or so to give them a chance to resolve situation (with sale of company). Apparently GS is willing buyer, but is buyer of last resort from LEH's perspective, b/c they would keep very few LEH employees.

If Goldman were to step in then they would probably wait until the stock price hits a buck, if it does. Then buy the firm for about $650 million. No need to spend $3 billion right now with all the toxic debt on the books. GS has their own problems with Level 3 and mortgage-backed securities.

(2) My current thoughts
The stock was down 40% today to $4.22. At this level, the market cap of the firm sits at about $3 billion.

I think thats still too much for anyone to move in and purchase up the firm ala a "white knight takeover."

To the best of my recollection, Bear closed shop at about a market cap of $250 million.

UPDATE (9:30am CST): Merrill Lynch analyst Guy Moszkowski has officially placed a "no opinion" on the stock as many other analysts are doing the same..

(3) Moody's: Ratings downgrade possible

From Reuters: Moody's Investors Service says that Lehman will have to complete a transaction such as a sale of a majority stake in the firm, or the entire company to avoid a ratings downgrade. In fact, they also stated that the bank will also need to take further action beyond the steps it announced on Wednesday to avoid a ratings cut.

Moody's said it would have downgraded Lehman's debt rating earlier on Wednesday, likely to the "triple-B" category, if it did not think a transaction was possible. Any deal would have to calm markets to preserve the ratings, the agency added.

Raising capital alone would also not preserve Lehman's rating, now "A2," as the firm suffers a crisis of confidence, Moody's said.

"Capital is one element but obviously confidence is a key element," said Bob Young, a team managing director at Moody's.

The rating agency on Wednesday put Lehman's ratings under review with the direction uncertain, citing the fluidity of the company's situation.

When it rains it pours. And keep in mind that when one rating agency downgrades the other usually does the same in a rather quick fashion.

September 10, 2008

From Reuters: Moody's Investors Service says that Lehman will have to complete a transaction such as a sale of a majority stake in the firm, or the entire company to avoid a ratings downgrade. In fact, they also stated that the bank will also need to take further action beyond the steps it announced on Wednesday to avoid a ratings cut.

Moody's said it would have downgraded Lehman's debt rating earlier on Wednesday, likely to the "triple-B" category, if it did not think a transaction was possible. Any deal would have to calm markets to preserve the ratings, the agency added.

Raising capital alone would also not preserve Lehman's rating, now "A2," as the firm suffers a crisis of confidence, Moody's said.

"Capital is one element but obviously confidence is a key element," said Bob Young, a team managing director at Moody's.

The rating agency on Wednesday put Lehman's ratings under review with the direction uncertain, citing the fluidity of the company's situation.

When it rains it pours. And keep in mind that when one rating agency downgrades the other usually does the same in a rather quick fashion.

Stay in Touch

Be sure to subscribe to my newsletter to stay in touch with my site. Over the course of this month, I will be adding downloadable excel spreadsheets that will allow investors to manipulate the financials for Goldman, Lehman, and Merrill. I will also be live-blogging their earnings conference calls in the upcoming months.

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I am always fascinated by successful entrepreneurs and the wisdom they provide. With that said, I am a big fan of, the Stanford educated, Peter Thiel, founder of Paypal and now hedge fund manager of Clarium Capital, a global macro venture capital fund he launched in 2005. He was an early investor in Facebook and sits on the company's board of directors. He is also an investor in Slide, LinkedIn and Friendster. You can download a great writeup of him right HERE.